Keyman & Shareholder Assurance

Do you have a key individual in your business whose loss of engagement could seriously impact your business performance? Well whilst you can never ensure they never get ill, you can at least protect the business from the impact. Key man insurance is a type of life insurance policy that is taken out by a business on the life of a key employee. It is also possible for the policy to pay out in the event of the key person being diagnosed with a specified critical illness such as cancer or heart attack.

Similarly losing a key shareholder could leave the business with a new and potentially non-experienced or engaged business partner. The untimely death of a business owner is, of course, very traumatic for his or her family as well as those connected with the business. One of the financial implications may be that the owner’s widow, widower or other beneficiaries inherits the shares but may have an immediate need for money, while the surviving shareholders may want to buy the shares but might not have sufficient funds available.

Business shareholder protection pays out a lump sum when a person it covers is diagnosed with a terminal illness, a specified critical illness or dies during the term of the cover to help business owner(s) to buy the insured shareholder’s interest in the firm (using the appropriate option agreement) and retain control over the running of the business.